March 19th, 2017 11:25 AM by Jackie A. Graves, President
Don't expect a big return on
most home improvement investments.
When setting out to improve your home,
you're usually motivated by making the space more comfortable for your family.
You justify the expense by saying that the project will inevitably add value to your home.
But most home improvements don't add as much value to your home as you spend on
the project, at least if you're going to sell soon. Remodeling magazine's 2017 Cost vs. Value report,
which analyzed 29 projects in 99 U.S. markets, found the only improvement that
added more value than it cost, using a national average, was adding insulation
to the attic. Smaller, less expensive projects like adding a new steel door
tended to bring a better rate of return than large, high-priced projects like a
master suite addition.
ROI varies by project and location.
Exactly which renovations will add value depends on where you
live -- not just your city or region but your neighborhood.
Installing a feature that people in your neighborhood expect (and need) is more
likely to pay off than adding high-end features not found in most other homes.
And adding square footage to a small home in a neighborhood of larger homes is
more likely to pay dividends than making your home the largest in the
neighborhood. The Cost vs. Value report also estimates costs on the high end,
so in some cases a more modest version of projects may yield as much or more
value than going all out.
Adding an in-ground pool.
The average cost for homeowners to add a pool was $41,975, according to reports by
HomeAdvisor.com customers. In most markets, you're unlikely to be adding nearly
that much to your home's value. While a pool is more likely to be prized in an
area where the weather is warm and most nearby homes have pools, even in those
neighborhoods it typically doesn't boost the value anywhere near what it cost to install
it. The Cost vs. Value report does not include pools.
Gourmet kitchen renovation
Redoing your kitchen with high-end finishes and
professional appliances might look great, but it won't yield nearly what you
spent when you go to sell. According to the Cost vs. Value report, a major
kitchen remodel added 65.3 percent of its $62,158 cost to a midrange home and
61.9 percent of its $122,991 cost to an upscale home. A minor kitchen
remodeling project -- replacing some appliances, laminate countertops and
cabinet doors -- had a much better return on investment, returning 80.2 percent
of its cost in value to a midrange home.
Patio or deck
You might think that adding a patio would significantly boost a home's
value. But the Cost vs. Value report calculated that adding a 20-by-20-foot
flagstone patio, with new sliding-glass doors, a fire pit, pergola and outdoor
kitchen, would return only 54.9 percent of its $51,985 cost for a midrange
home. A more modest 16-by-20-foot deck addition fared better, returning 65.2
percent of the $17,249 cost of a composite deck and 71.5 percent of the cost of
a $10,707 wood deck, both for a midrange house.
Master suite addition
In general, it's hard to get your money back from an
addition because the
project is so costly. Remodeling magazine estimates the cost of a midrange
master bedroom addition at $119,533 and predicts that it will add only $77,506
to the home's value, or 64.8 percent of its cost. On an upscale home, the
project would return 59.9 percent of its $250,687 cost.
Adding a bathroom.
Another bathroom would really increase your home's value, right?
Well, the Cost vs. Value report found that a bathroom addition added only 64.8
percent of its $43,232 cost to a midrange home and 57.1 percent of its $81,515
cost to an upscale home. Adding a bathroom within your home's existing footprint,
which has a much lower cost, is likely to yield more value versus its cost,
especially if you're adding a second bathroom to a one-bath house.
Installing new windows.
Many homeowners mistakenly believe that installing new windows
will cut costs for heating and air conditioning, but it usually
takes many years to get back the cost in energy savings. While new windows may
improve your home's look and feel with more natural lighting, they rarely add
as much value as they cost. A 2015 survey by the National Association of
Realtors estimated that installing new vinyl windows would recoup 80 percent of
the $15,000 cost when the home sells, but only installing wood windows would
reap 58 percent of the $26,000 cost. Remodeling magazine's Cost vs. Value
report estimated that new windows would regain about 70 percent of their cost
in an upscale home, whether the windows were wood or vinyl.
By Teresa Mears - To view the original article